New York Times: You Shouldn’t Need a Doctor’s Note to Switch Formula Brands
On Wednesday, responding to the baby formula shortage crisis, President Biden said he is invoking the Defense Production Act “to ensure that manufacturers have the necessary ingredients to make safe, healthy infant formula here at home.” He also announced something called Operation Fly Formula “to speed up the import of infant formula and start getting more formula in stores as soon as possible.”
It’s about time. If you’re a parent struggling to feed an infant, the shortage is, indeed, a crisis. Two children in Tennessee were hospitalized recently because they couldn’t get the specialized formula they needed for their medical condition.
In his newsletter, Matt Stoller, the director of research at the American Economic Liberties Project, wrote that when a formula company is granted that contract, it has a knock-on effect for consumers in that state:
This rebate system distorts the entire market in a state, because it’s just not worth having alternative formulas on a retail shelf if half of the buyers simply cannot purchase those formulas. As a result, the market tips to the WIC supplier, and that supplier raises prices on non-WIC recipients, and does so by between 26 to 35 percent.
And these contracts can make it easier for companies to dominate the market: According to The Washington Post, “Four major companies control 90 percent of the infant formula supply in the United States: Abbott, Gerber, Mead Johnson and Perrigo Nutritionals.”